Policy cancellations: You can’t fire me – or can you?

The enrollment period for health insurance under the Affordable Care Act closes at noon today. Chances are good that those of us who have put this off to the very last minute will have a tremendous sense of relief when it’s finally taken care of. There is a certain comfort that comes from knowing that your insurance is in place for another year.

The same goes for writing premium checks to auto and home insurance companies. Phew. Now we don’t have to think about that again. Unless we have a claim, of course.

If there is one thing that Floridians know better than anyone, it is that we should never take insurance for granted. The process may look done, but there is always the chance that something will go awry. We may look surprised when we receive an unexpected communication from our insurance company, but, deep down, we always knew it could happen.

Claim denials can be a pain to deal with, and notices of premium increases are unpleasant. The most stressful communication anyone can get from an insurance company, though, is the cancellation letter. “Great,” we think, “now we have to find new coverage and start the application process all over again.”

It is a pain to start from scratch, but what choice do we have? We need insurance. So we start making calls — saving money in 15 minutes or half the time — just to get this off the list. And, of course, to make sure we are covered if there is an accident or a hurricane or something.

What we often overlook is the part of the letter that comes after the bad news, the part that explains why the insurer has canceled the policy. It may seem futile — Why does it matter? I need coverage! — but insurance companies have to explain why they cancel a policy, and they can only cancel for a handful of reasons.

If that reason is legitimate, we know we are done. If that reason is bogus, though, we know we can argue the point. But what are the legitimate reasons?